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Investors are anticipating a historic shift in Japan's monetary policy—a shift they expect to finally shake Japanese stocks out of a 20-year slumber. Prime Minister Shinzo Abe had signaled his intent for aggressive monetary stimulus even prior to his election in December. Since then, the yen has slumped and the Nikkei Stock Average has surged, topped off by a 9.5% rise in 2013, the biggest rise among all major developed stock markets.

Little wonder, then, that an eight-week flood of $3.1 billion in new cash has moved into the relatively small niche of exchange-traded funds tied to Japan's stock market. "The ETF money is trying to find the central bank that's going to ease the most aggressively," says Dave Lutz, head of ETF trading at brokerage Stifel Nicolaus. "Right now, that's Japan." The trend is pronounced enough that one of the Japan funds is the No. 2 asset gatherer in the entire U.S. ETF market this year, trailing only a popular emerging-markets fund.

That "middle ground" idea looks more enticing in light of some recent Leuthold Group research. The firm notes that investors who buy last year's second-best performer among seven widely held assets—real estate investment trusts, the Standard & Poor's 500, the Russell 2000, gold, Treasury bonds, the GSCI commodity index, and the EAFE international-stock index—have enjoyed an annualized 15.6% return since 1973. The theory is that the No. 2 asset tends to have more room to run than the top performer. This year's pick is the EAFE global stock index, with its 20% Japan weighting.

Optimists were given a new number last week—$9 trillion (or close to it), the amount Japanese households are thought to have saved over the past two decades. If even a fraction of that goes into Japan's stock market, investors will benefit. But if too much optimism makes you nervous, there are still funds built to exclude Japan.
iShares MSCI Pacific ex-Japanepp 0.3750586029067042%iShares MSCI Pacific ex Japan ETFU.S.: NYSE Arca42.82
0.160.3750586029067042%
/Date(1438376400119-0500)/
Volume (Delayed 15m)
:
348606AFTER HOURS42.82
%
Volume (Delayed 15m)
:
P/E Ratio
N/AMarket Cap
N/A
Dividend Yield
4.447627276973377% Rev. per Employee
N/AMore quote details and news »eppinYour ValueYour ChangeShort position
(EPP), a developed-market fund that is the most widely owned "ex-Japan" Asian stock ETF, gained 5.1% in January, just a hair behind the MSCI EAFE's 5.2%. Shareholders aren't yet regretting the absence of Japan.